Amazon has forged into the B2B market with Amazon Business and has already hijacked more than one million business customers. This B2B-specific offering provides business-only pricing on at least 9 million products and access to more than 85,000 business sellers.
Amazon’s tendency to overtake emerging markets is nothing new—just look at what it has done in retail, consumer packaged goods, or CPG, and industrial supply. Given Amazon’s rapid land grab in these industries, businesses in B2B should be fast-tracking their efforts to develop a strategy ensuring they can keep their slice of market share.
It’s tempting for B2B businesses to adopt an, “if you can’t beat them, join them” attitude and sell their products directly on Amazon. But joining the Amazon marketplace isn’t the sole e-commerce answer for most companies. With every product sold, Amazon not only takes a percentage of revenue but, more important, owns the relationship with the customer and the data that comes with that relationship. Amazon will continue to cannibalize B2B businesses that can’t provide the same flexible, simple buying experience on their own commerce sites.
For businesses that want to maintain ownership of their customers, establishing a strong e-commerce presence is the best strategy. Businesses need to provide the same level of convenience that customers have come to expect in their personal lives, while also meeting the complex needs of business buyers. That’s the only way to keep an edge against the looming threat of Amazon’s resources and infrastructure.
Three Must-Have Commerce Features to Match the Amazon Experience
The good news is, today’s manufacturers still have an edge over Amazon when it comes to B2B buyers’ purchasing power. By some estimates, 20% of B2B buyers would be willing to pay slightly more to buy directly from the brand that manufactures the product they’re purchasing. And purchasing habits reflect the same mindset. Nearly 30% of buyers report they typically buy through a brand manufacturer’s website, compared to just 9% on Amazon Business, according to the Forrester Research/Internet Retailer Q1 2017 B2B Buy-Side Online Survey.
But if the decline of purchases on industry distributor websites in the last three years is any indication of manufacturers’ futures, they’d better start making some improvements to their online presence. And fast. In 2015, according to an earlier Forrester Research/Internet Retailer survey, 30% of B2B buyers typically finished their purchases on a distributor’s website. Today, a mere 16% of B2B buyers say the same.
A commerce experience helpful to online buyers should be a top priority for B2B brands that want to stay competitive. A user-friendly site is in the top three factors that drive repeat business and loyalty, outranked only by credible product information and price according to the Forrester/Internet Retailer Q1 2017 survey. This means businesses will benefit from investing in a commerce solution that can compete with Amazon Business’s most appealing features, with offerings like contract pricing to offset the Amazon Prime free two-day shipping program and a variety of payment options such as credit card, invoice and purchase order to offset Amazon Cash.
Must-have features of a robust B2B commerce site include:
- B2B Personalization. A website should provide a commerce experience that is unique to each customer and accommodates her needs and preferences. If designed to enable B2B businesses to integrate data from CRM, sales, service and commerce interactions, an e-commerce platform can offer a single lens of the customer across channels. This 360-degree view ensures B2B organizations can provide tailored offers, personalized recommendations, and respond more quickly to changing buyer habits.
Look to the software industry for an example of this experience in action. One method is through cloud-based SaaS business models, which have grown in popularity because of their ability to personalize subscriptions to products based on companies’ unique needs. Avid, a supplier of products used to develop recorded video and musical content, for example, allows users to pay a monthly subscription fee for specific products or upgrades rather than purchasing the entire off-the-shelf product suite. The company experienced a return on investment for its commerce site in five months from deployment. Typical commerce systems take a minimum of 12-18 months to produce ROI.
- B2B sites must have the flexibility to compete with Amazon’s robust offerings that continually adapt to evolving customer needs. That means businesses need a platform that enables quick iterations based on customer feedback and regularly incorporates new applications and technologies that keep the solution relevant. Through a cloud-based architecture, B2B businesses can easily add on new products and services through configuration instead of complex coding.
Imagine a bottling manufacturer that wants to add a new geolocation feature so that customers can more easily track their order shipments. A flexible platform that is connected to a strong partner network such as the Salesforce AppExchange can easily configure an application to track orders with no disruption to the commerce platform. This flexibility ensures the manufacturer can add the feature quickly and efficiently. And the ability to easily scale will impact the organization far beyond its current needs. Cloud-based commerce platforms are built to scale and incorporate new technology over time as customer and market needs evolve.
- Self-service options. Self-service options are the cornerstone of Amazon’s business model and the building blocks of an innovative B2B business. Not only does self-service allow buyers to make purchases at their convenience, but it also allows buyers to research and make purchases online, which helps reduce order errors and overhead costs per transaction. As an added bonus, self-service frees up salespeople to focus on more strategic conversations and strategy rather than processing routine orders.
Think about the number of routine inventory orders beverage retailers such as gas stations make with CPG partners like Coca-Cola every month. Through a self-service platform, retailers like this can more easily manage inventory whenever and wherever it’s convenient for them. In turn, salespeople on the supplier’s side won’t bottleneck the order process or waste their time on routine tasks.
Amazon CEO Jeff Bezos is committed to maintaining a “Day 1” mentality. To him, “Day 2” in business means complacency followed by irrelevance and then massive decline. This mantra ensures Amazon will continually disrupt emerging markets—like B2B commerce—and is a wake-up call to businesses.
To further prevent Amazon’s capitalization on the marketplace, B2B businesses must invest in a commerce platform that enables convenient buying experiences for customers and can easily incorporate new capabilities that ensure long-term success.
Ray Grady is president and chief customer officer at CloudCraze, where he spearheads business development, customer success, professional services and continued global expansion in the United States, Europe, the Middle East and Africa. CloudCraze is a vendor of cloud-based e-commerce built natively on the Salesforce platform. Prior to CloudCraze, Grady was senior vice president and general manager of Acquia, a provider of software-as-a-service technology and related services. Before Acquia, he co-founded Acquity Group, which went public in 2012 and was acquired by Accenture Interactive in 2013. Follow Ray and CloudCraze: @raygrady1971 and @CloudCraze.Favorite